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Health and community services super fund HESTA has announced today it is investing $240 million into the build-to-rent (BTR) market via new fund manager Super Housing Partnerships (SHP).
The fund manager will initially focus on a pipeline of BTR apartments in Victoria, where it hopes to develop 1,600-plus dwellings comprising social and affordable housing, specialist disability housing and commercial BTR.
SHP’s first fund is partnering with Melbourne-based housing developer Assemble, which is 25 per cent owned by AustralianSuper, as well as one of the nation’s largest nationally accredited community housing providers - Housing Choice Australia.
“We have the opportunity to innovate and invest to meet an unmet need, providing our members with appropriate risk-adjusted investment returns by improving housing supply,” HESTA CEO Debby Blakey said.
“A lack of access to housing impacts our members who provide critical services and need to afford housing near their work, and economic productivity that presents broader systemic risks to long-term investors like HESTA.”
More established in markets such as the US, BTR housing is a model based on residential accommodation that has been purposely built and designed to house long-term tenants, rather than being sold to individual owners. Ownership is typically retained by investors.
Recent players tapping into Australia’s BTR market include multinational Greystar Real Estate Partners, which is behind a $500 million project in South Melbourne that is set to become one of the nation’s largest BTR developments. The global real estate group has even more BTR projects in the pipeline after acquiring 155 Johnston Street, Fitzroy for an undisclosed sum one month ago.
Meanwhile, Sydney-based developer Mirvac has more than $1 billion BTR developments under construction, with the completion of 490 apartments at LIV Munro in Melbourne's Queen Victoria Market (QVM) precinct underway.Lendlease Group (ASX: LLC) and Raptis Group (ASX: RPG) are also seeking out potential BTR opportunities to bolster the bottom line.
“We welcome HESTA’s significant $240 million initial investment as this commitment demonstrates the value of SHP to large institutional investors seeking real assets, while delivering vital outcomes for Australians struggling to access secure housing,” SHP venture partner Kris Daff said.
“There are society-wide negative impacts associated with the housing affordability crisis. It was not that long ago we were worried about how ordinary working Australians were able to purchase their first home – we have moved well beyond that to a point where the concern is now how everyday Australians can even rent a home.
“SHP intends to expand its initial Victorian portfolio and is currently working with key strategic development partners for the delivery and operation of assets nationally.”
All SHP housing projects aim to be net zero operational carbon budlings.
“The SHP platform is a game-changer and exactly what the affordable housing market in Australia needs,” Housing Choices Australia managing director Michael Lennon said.
“The vision from HESTA and the SHP team plus the commitment to work with Community Housing Providers to deliver genuine quality housing for those who need it most is unique, and very welcome."
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